7-May-18 The Chicago areas million-dollar-plus home market was on a roll in early 2018, showcasing its best performance in seven years.
A whopping 489 existing luxury homes, townhomes, and condominiums with price tags of $1 million or more were sold in the first quarter of 2018. It was an increase of 7.5 percent over the same quarter last year and the most sold in that quarter since 2011, according to the RE/MAX Luxury Report on Metro Chicago Real Estate.
The median sales price of million-dollar-plus homes rose a hefty 5.5 percent to $1.35 million, the second consecutive quarterly gain following four quarters in which the median price declined in comparison to the same period one year earlier.
||Demand for luxury homes is clearly on the upswing right now, noted Jeff LaGrange (left), Region Vice President for five RE/MAX regions, including Northern Illinois. Only time will tell if this is a temporary situation sparked by buyers eager to act before interest rates move higher, or if this reflects a longer-term trend that will help pare down the large number of luxury listings on the market.
If the median sales price continues to advance, LaGrange said it will confirm that demand and supply are moving into better balance.
Sales of luxury homes up if attached, down if detached
Chicagos luxury-attached home market townhomes and condos enjoyed an upbeat first quarter, with 140 luxury units changing hands, 16.7 percent more than the same period in 2017.
That compares with 120 luxury detached single-family homes sold in the quarter a decline of 1.6 percent but still the second strongest first-quarter sales figure for this category of homes since RE/MAX began tracking that data in 2011.
The median sales price for luxury single-family homes rose 3.9 percent to $1.39 million during the first quarter. The median price of luxury townhomes and condos increased 4.7 percent to $1.33 million, RE/MAX reported.
The hottest neighborhoods for million-dollar-plus homes were North Center and Lincoln Park, which together accounted for slightly more than half of all first-quarter luxury detached sales in the city.
North Center led the city with 28 luxury sales with a median price of $1.37 million, a gain of 12 percent over the first quarter of 2017. Lincoln Park posted 25 luxury sales with a median price of $1.7 million, a gain of 8.7 percent over the first quarter of last year.
|(Right) One of four bedrooms of Unit 1002 at 1550 On The Park. The penthouse unit overlooks Lincoln Park and Lake Michigan and is for sale for $5.65 million.
However, the combined 7.5 percent increase in city luxury sales volume for the quarter came with an uptick in average market time to 166 days, a 12-day increase. And while the inventory of luxury homes for sale in the city remained essentially stable, falling just 0.6 percent, that result masked an interesting split.
Spurred by new development, the inventory of luxury townhomes and condos rose 12.9 percent, while the luxury single-family home inventory declined 14.7 percent. This reflected a recent slowing of new construction in that category, RE/MAX said.
Another encouraging development in the first quarter was a continued reduction in the number of unsold homes listed for at least $1 million. Luxury listings in the Chicago area fell 5.6 percent to 2,742 units. However, they declined only 0.6 percent in Chicago. RE/MAX reported there is an 11.8-month supply of luxury home listings in Chicago.
Explosion of luxury units sold in Near West
RE/MAX reported one noteworthy shift in the citys luxury townhome and condo market. The Near West Side emerged as a sales leader for attached luxury residences. During the first quarter, that area registered 25 luxury-attached sales.
RE/MAX said that fact is particularly striking because from 2011 through 2017, first-quarter sales of luxury-attached homes on the Near West Side totaled only eight units. In 2017, there were 12 luxury-attached sales there during the first six months, then 33 sales in the July-through-December period.
||(Left) Rendering of Unit PH8D at 1109 West Washington Boulevard that will be available this fall for $1.835 million.
Suburban luxury sales, which almost exclusively involve detached homes, delivered generally positive results. Sales activity rose 7.5 percent to 229 units during the first quarter and the median sales price climbed 2.4 percent to $1.3 million, compared with the same period last year.
However, average market time increased to 257 days from 228 days a year earlier. Luxury home listings in the suburbs fell 8.4 percent in the first quarter. Inventory had been especially high for the last few years, RE/MAX said.
Even with that reduction, existing luxury listings in the suburbs still represent a 22.5-month supply of homes based on the pace of first-quarter sales.
Hinsdale had the most active luxury market during the quarter, with 29 sales, a 16 percent increase over the same quarter in 2017. Winnetka recorded 23 sales, a decline of 17.9 percent over the first quarter last year. Solid sales gains were seen in several other leading suburban luxury markets, including Wilmette, up 8.7 percent to 25 units, Lake Forest, up 84.6 percent to 24 units, Naperville, up 116.7 percent to 13 units, and Glencoe, up 120 percent to 11 units.